(Josh Adams/Sherwood Media) |
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The AI boom has made for some very strange business deals when it comes to building out data centers. Take, for instance, the saga of a small Delaware company called Laidley LLC working on "Project Sucre." Laidley wanted to build "a multi-billion-dollar datacenter campus" in Richland Parish, Louisiana, "resulting in several hundred new good paying jobs." The tax breaks and incentives that Louisiana gave Laidley are worth billions. |
- Then, a few months later, the reveal: Laidley LLC is a little-known subsidiary of Meta, and Sucre was none other than Hyperion, a gargantuan AI data center.
- Because of the incentives, the company will pay no sales tax on the tens of billions of dollars' worth of expensive GPUs and advanced networking gear that will fill the data center's racks.
- A Sherwood News analysis shows that the breaks afforded to Meta on just the sales tax of GPUs would come out to more than $3.3 billion — enough to build 33 new high schools, pay the salaries of all the state's public school teachers for more than a year, or pay for more than seven years of the Louisiana State Police budget.
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The announcement that Meta was going to make Richland Parish the site for its most ambitious piece of AI infrastructure to date was welcome news for a lot of the region's 20,000 residents. Some farmland near the Hyperion site is currently listed for sale at $73,000 per acre, well above the $6,500 per acre you'd get for premium farmland. |
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The issue, though, is that the jobs footprint is pretty ephemeral for a project that will be part of the community for decades. Sure, Meta says the project will employ more than 5,000 skilled trade workers during peak construction. But after construction is finished in 2030, jobs at the sprawling data center will drop by 90%, with around 300 to 500 "operational" full-time employees, according to the company, though those jobs are not legally required to go to local workers. And ratepayers would bear the cost of a new 60-mile, 500-kilovolt power transmission line to serve the facility, with a cost of $470 million. |
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- AI jitters are rattling the market: Negative sentiment following Broadcom's earnings combined with a Bloomberg report saying Oracle is delaying some data centers for OpenAI to 2028 from 2027 weighed on everything connected to the AI trade last week, from data centers to Google-linked AI bets and beyond. Oracle's subsequent denial of the report pared some of its losses but did little to reverse the trend, and while Nvidia had gotten a boost premarket from a report that it was considering boosting H200 production, it lost all those gains and finished Friday lower.
- Pilot shortages are bad, and might only get worse: As we head into a busy holiday travel season, while we wish smooth journeys for all, the odds of that coming true are on the decline if airplanes are on the agenda. While the forecast for industry revenue is rising, the number of pilots approaching the mandatory retirement age for commercial flights is set to intensify the already existing pilot shortfall. And sadly, while the $5,000 gold status pass from American Airlines may get you to the front of the line, there still has to be a plane to board for that to matter.
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There were some doozies this year. While you may know which CEO said he can't imagine raising a newborn without ChatGPT, can you guess which one boasted, "You should've seen some of the memes that are on the internet. Have you guys seen some of them? We're basically holding the planet together — and it's not untrue." |
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- 🏈 MNF: The Miami Dolphins are taking on the Pittsburgh Steelers tonight in Monday Night Football, with Pittsburgh considered the solid favorites with a 61% chance of victory in the AFC matchup.
- 🏛️ Fed Chair: On Friday, President Trump indicated he was looking at either National Economic Council Director Kevin Hassett or former Fed governor Kevin Warsh as his pick to lead the Federal Reserve next year, which sent the market-implied* probability of Warsh getting the nod shooting up from 15% to 35%.
- 🎬 Avatar: Markets seem pretty dang certain that "Avatar: Fire and Ash" will not have the juice to beat the $150 million domestic box office opening of "Wicked: For Good," with markets assigning a 98% chance that "Avatar" won't make the grade. It's obviously a pretty steep hill to climb, but if history is any guide, it's never a sure thing to count James Cameron out.
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*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC. |
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- The economics of Instacart's grocery delivery are pretty tight — AI might help, or hurt
- The Trump administration is reportedly close to reclassifying marijuana, much to the joy of weed stocks
- After a good night's rest, investors completely reversed course and decided they liked Rivian's AI Day event
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- Tuesday: BLS releases delayed November jobs data. Earnings expected from Lennar
- Wednesday: Earnings expected from General Mills and Micron
- Thursday: Initial jobless claims. November CPI. Earnings expected from FactSet, CarMax, Darden Restaurants, Birkenstock, Accenture, FedEx, and Nike
- Friday: November existing home sales. Earnings expected from Lamb Weston, Carnival Corporation, and Conagra
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